The CGST Commissionerate in Gautam Buddh Nagar unearthed GST evasion to the tune of Rs. 9 crore by a private company and arrested its director, Vinay Kumar, and a Chinese national Alice Lee, who handled cash. Kumar and Lee were produced before the special economic offences court of chief judicial magistrate Durgesh Nandini on Wednesday, and were remanded in judicial custody.
The company, M/s Tentech LED Display Pvt Ltd, is a join venture between Indian and Chinese stakeholders. According to Special Public Prosecutor (GST & customs) Lakshay Kumar Singh, the company was engaged in manufacturing Video Display Units (VDUs) but deliberately misclassified them as “cabinets” to attract a lower GST rate of 18% instead of the applicable 28%. This misclassification alone resulted in a 10% short payment of GST.
According to CGST inspector Aditya Bajpai, the company routinely under-invoiced VDUs, declaring their value at Rs.1,000 – Rs.5,000 through the actual market price was close to Rs. 18,000. The difference was collected in cash from customers, creating a parallel stream of unaccounted money. Evidence showed that such practices were carried out under direct instructions from Chinese directors Hu Lei and Tang Kai.
Surendra Singh, a former director of the firm, corroborated that the company used imported components to assemble VDUs but intentionally undervalued and misclassified them to evade taxes.
Senior investigation officer Sudhir Prakash Kala said, “Alice Lee has been identified as the Chinese cash handler. She regularly collected undeclared cash from the company premises and ensured its transfer abroad. Officials revealed that since the company’s registration in 2019, Lee siphoned off nearly Rs. 27 crore through hawala networks to the Chinese directors.”
Chinese directors held 49% stake while their Indian counterparts held 51% hare in the company. Officials also revealed that the firm even shifted their address from what was mentioned in the GST department and were operating from an undisclosed location in Gautam Buddh Nagar.
Source: The Times of India
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